Crypto MARKET UPDATE China Full-Stopped the BULL RUN (Temporary)

Market Update Newsletter: Bitcoin and Altcoin Cycle Insights

Bitcoin's historical halving events have consistently served as pivotal moments for understanding market behavior, and 2025 appears to be no exception. Halvings, which reduce mining rewards by 50% every four years, are a key driver of supply dynamics and significant price movements. As we progress through this bull market, recent developments underscore the importance of staying vigilant in analyzing both Bitcoin's performance and the broader cryptocurrency market.

Key Developments in Bitcoin's Bull Market LAST NIGHTS DIP

Bitcoin's Dip and Recovery

Last night, Bitcoin experienced a notable dip below $100,000, triggered by news that a Chinese company, Deepseek, has developed a much cheaper and faster large language model (LLM) than ChatGPT. This announcement briefly spooked the market, but Bitcoin quickly rebounded to nearly $102,000 by the end of the day. While such volatility is unsettling, it reflects the dynamic nature of crypto markets and the rapid pace of technological innovation that can influence sentiment. Tech stocks took a beating. The A.I. Race is on!

Price Trajectory for 2025

Bitcoin's price movements so far align with patterns observed in previous cycles. Here are two potential scenarios for the year ahead:

1. Bullish Scenario: A rise to $120,000-$140,000 in Q1, followed by a seasonal Q3 correction. This would mirror previous cycles, such as 2016-2017, where strong early-year performance preceded mid-year consolidation.

2. Bearish Scenario: A "left-translated" cycle featuring an earlier peak followed by an extended decline. If macroeconomic headwinds intensify, such as accelerating inflation or rising unemployment, Bitcoin's price may stabilize around $100,000 by Q3.

   
   
   
   
   
   

Broader Market Influences

Institutional and Global Economic Factors

Bitcoin's maturation into a more widely recognized asset class has brought increased institutional participation, stronger correlations with traditional financial markets, and greater sensitivity to global monetary policy.

• Federal Reserve Quantitative Tightening: The Fed's ongoing efforts to reduce market liquidity influence borrowing costs and risk appetite. Cryptocurrencies are not immune to these effects, and investors should monitor dollar strength and liquidity metrics.

• Yield Curve Dynamics: Recent changes in bond yield curves, such as the un-inversion of the 3-month/10-year and 2-year/10-year curves, suggest rising near-term recession risks. These shifts impact institutional strategies and could affect capital flows into crypto.

Insights Into Altcoin Market Potential

Bitcoin Dominance (BTC.D)

Bitcoin Dominance (BTC.D) is a critical indicator for identifying altcoin season trends:

• BTC.D is currently struggling to maintain dominance, with the 60% level acting as resistance.

• A confirmed break below the 50SMA could signal a major altcoin rally. Traders should watch for continued weakness in BTC.D as a potential precursor to altcoin outperformance.

TOTAL3 Chart and Fibonacci Levels

The TOTAL3 chart, which tracks the market cap of altcoins excluding Bitcoin and Ethereum, shows promising signs of growth:

• If historical patterns hold, a possible potential market cap targets include:

  • 1.6 level at 1.77 Trillion, but I will keep an eye on the market once it pass 1.5 T (remember these are zones) not exact profit-taking levels.

These levels suggest significant upside potential for altcoins, particularly if Bitcoin's dominance continues to decline.

Key Indicators to Watch

Bitcoin's Pi Cycle Top

The Pi Cycle Top indicator has historically been a reliable gauge for identifying bull market peaks. Key observations include:

• The indicator signals peaks when the 111-day Moving Average crosses the 350-day Moving Average.

• Currently, Bitcoin is holding the 111MA as support and facing resistance at the 350MA (~$140,000).

• Breaking above the 350MA could propel Bitcoin into the "Banana Zone," a region associated with further upside potential.

Altcoin Season Confirmation

To confirm the onset of altcoin season, traders should monitor the following:

• BTC.D breakdown below key support levels.

• TOTAL3 chart progression through critical Fibonacci levels.

Closing Thoughts

The cryptocurrency market remains firmly in a bull cycle, with Bitcoin's recent recovery above $100,000 reaffirming its resilience. While technological and macroeconomic developments introduce uncertainty, they also present opportunities for informed investors. The altcoin market, guided by key indicators like BTC.D and TOTAL3, offers potential for significant gains as the cycle progresses.

Stay informed, stay prepared, and as always, happy trading!